In order to be successful in a market economy, entrepreneurs must
A) combine resources in a manner that increases their value.
B) produce anything that consumers value, regardless of cost.
C) use only personal financial capital so they can avoid interest payments on borrowed funds.
D) produce a good that consumers value less than the resources used to produce it.
A) combine resources in a manner that increases their value.
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The workers in Adam Smith’s famous pin factory, who were proficient in pin production, faced the problem of
A. too many different tasks. B. becoming bored with their jobs. C. needing to exchange pins for other goods and services. D. not having too few pins to purchase other goods and services.
Suppose that banks pay 4 percent interest on checking accounts while U.S. Savings Bonds pay 6 percent interest. Under these conditions
A) no nonmonetary assets are willingly held. B) a combination of money and nonmonetary assets are willingly held. C) no money balances are willingly held. D) we do not have sufficient information to tell whether or not any money balances are willingly held.
Refer to Scenario 5.6. If the doctor is risk-averse, she would accept
A) $50,000 for sure rather than take the risk of being a researcher. B) $60,000 for sure (the minimum HMO outcome) rather than take the risk of being a researcher. C) $95,000 for sure rather than face option 1 and option 2 in research. D) $275,000 for sure (the average of option 1 and option 2 in research), but not less, rather than face the risk of those two options. E) the research position because it has the highest possible income.
If you, as sole proprietor of a corner grocery store, work 15 hours per day, six days a week but do not take a money wage payment, then the cost to your firm of your labor is your
a. opportunity cost and is considered an explicit cost b. opportunity cost and is considered an accounting cost c. opportunity cost and is considered an implicit cost d. explicit cost and is considered an opportunity cost e. implicit cost even though it is considered an explicit cost